When C and R enter into a contract which is breached by R, C can either claim specific performance of the contract, or elect for the breach to have discharged the contract and claim damages. However, in cases where the latter option is chosen, it has been recognized since Johnson v Agnew that the contract continues to remain valid until the date of the repudiatory breach and is discharged only...
The Court of Appeal on the ‘Entire Contract Doctrine’
In any synallagmatic arrangement (such as a contract), it is often necessary to determine at what stage one party is entitled to call on the other to perform. Consider two common cases: (i) A enters into a contract with B which he breaches, B wishes to treat this as a repudiatory breach and avoid the contract; and (ii) A makes an advance payment to B under a contract, which is subsequently...
Limits to the ICS Approach and the Implication of Terms into a Contract
Sir Guenter Treitel has said that Diplock LJ’s judgment in Hongkong Fir Shipping v Kawasaki Kisen “has a fair claim to being the most important judicial contribution to English contract law in the past century.” Perhaps not too far behind is Lord Hoffmann’s speech in Investor Compensation Schemes v West Bromwich Building Society [“ICS”], where the “modern” approach to the construction of...
‘Matter which is the subject of an arbitration agreement’
The English High Court, in August this year, has decided an important point on the scope of an arbitration agreement, which, given the similarities in language between section 9 of the English Arbitration Act and section 8 of the Indian Act, is of significance in the Indian context too. The claimant in Deutsche Bank v Tongkah Harbour had provide a financing arrangement to the Tungkum Limited...
Court of Appeal on the Award of Damages
A recent decision of the UK Court of Appeal revisits the issue of alternative remedies, one on which there has been significant academic debate. An earlier post discussed the issue of concurrent liability in contract and tort, where the Court of Appeal had clarified some doubts in the area. However, the issue in Ramzan v Brookwide was different- not so much the existence and scope of different...
The Nature of an Arbitrator’s Contract with the Parties
There are some contracts that cannot be easily analysed under existing classifications of legal relationships. An example with which readers may be familiar is a software transfer agreement, which, in the words of Professors Green and Saidov, “…is not truly analogous to any conventional chattel with which the law is familiar”. Similarly, identifying the nature of the contract between an...
Good Faith in English Contract Law
Over the past few years, the traditional distinction between the common law and civilian notions of good faith in the law of contract has been blurred. However, instead of incorporating a general obligation of good faith in contract, English law has adopted a piece-meal approach, by accepting the obligation of good faith in insurance contracts, when fiduciary relationships are involved, when...
Enforceability of “Side Letters”
Background It is customary for parties to enter into “side letters” in corporate and commercial transactions. Side letters are documents which are ancillary to the principal transaction documentation. There are a number of reasons why parties could potentially enter into side letters, rather than include their subject matter in the principal documentation. Side letters are useful when parties...
Restraining the Breach of a Negative Covenant
It is common knowledge that an injunction is granted only if the applicant satisfies the court on the three-pronged test of prima facie case, irreparable injury and balance of convenience. While there is controversy over the scope of some of these elements, notably prima facie case, and over the relationship between these elements, there are also circumstances in which an applicant may be able to...
The Romalpa Clause and Bankruptcy Protection
To a supplier or, more generally, to any commercial entity involved in the initial stages of a supply chain, protecting itself in the event of the bankruptcy or change in constitution of its principal buyers is a matter of great importance. It is therefore commonplace to find clauses in a contract creating, for example, a unilateral right to terminate in the event of change of control. Similarly...
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